Kerber v. Rowe

• Decision Date: 16 December 1941
• Docket Number: 37637
• Citation: 156 S.W.2d 925,348 Mo. 1125
• Parties: Carl Kerber, Appellant, v. W. A. Rowe et al
• Court: Missouri Supreme Court

156 S.W.2d 925

348 Mo. 1125

Carl Kerber, Appellant, v. W. A. Rowe et al

No. 37637

Supreme Court of Missouri

December 16, 1941

Appeal from Circuit Court of City of St. Louis; Hon. John A Witthaus, Judge.

Affirmed.

E. McD. Stevens for appellant.

(1) The certificate of stock for twenty-four shares of stock was paid for by money or property of the plaintiff and his sister. It never belonged to Mrs. Elizabeth Kerber and a constructive trust arose by operation of law in favor of plaintiff. Calloway Bank v. Ellis, 238 S.W. 844, l. c. 847, and cases cited on page 874; Ambruster v. Ambruster, 31 S.W.2d 28. (2) Mrs. Kerber being the guardian of her minor son at the time of the issuance of the certificate of stock in her name, she being his trustee, could not purchase any outstanding title and hold it to her own use as against her cestui que trust, the plaintiff herein, and when as charged in the petition, the shares were purchased with plaintiff's funds or property, a trust resulted in plaintiff's favor. Edwards v. Gottschalk, 25 Mo.App. 549; Harrison v. Smith, 83 Mo. 210; Hougan Rlty. Co. v. Bank, 273 S.W. 772. (3) Even though it may be said Mrs. Kerber had a dower interest in the assets of Kerber & Rowe, and partly used such interest to acquire the stock certificate, she being a trustee, mixed said property so that it could not be separated, nor the amount ascertained. Then the whole became both in law and in equity, the property of the trust estate and now belongs to plaintiff. Tuffs v. Lafshaw, 172 Mo. l. c. 373; Orr v. St. Louis, 291 Mo. 283; Snodgrass v Moore, 30 Mo.App. 332; Moore v. Bank, 154 Mo.App. 516; Patterson v. Booth, 103 Mo. 402; Mialdna Bank v. Brightwell, 148 Mo. 358; Hynds v. Hunds, 253 Mo. 20; 65 C. J. 420. (4) As between the trustee and cestui que trust, the statute of limitations can never run. Elliott v. Landis Machine Co., 236 Mo. l c. 567; Orr v. St. Louis Union Trust Co., 236 S.W. 642, 291 Mo. l. c. 404; Ewing v. Shannahan, 113 Mo. 188. (5) Plaintiff did not sustain any damage until the attempted disposition of the stock certificate. The statute did not begin to run until the filing of her will in 1939. Sec. 1012, R. S. 1939. (6) The defendants are all strangers to the trust, and the statute never runs in their favor. Ewing v. Shannahan, 113 Mo. l. c. 97. (7) Where a parent purchases property with funds of the child, a resulting trust arises pro tanto. Stevens v. Fitzpatrick, 218 Mo. 708; 65 C. J. 416. (8) The statute of limitations never runs in favor of a trustee ex maleficio. Elliott v. Landis Machine Co., 236 Mo. l. c. 567.

A. E. L. Gardner for respondents.

(1) It appears on the face of plaintiff's petition that the acts complained of by plaintiff and which form the basis of his alleged cause of action occurred in 1916, or twenty-four years next before the filing of this suit on July 26, 1940. Therefore, his cause of action, if any, is barred by the statute of limitations. Secs. 1013, 1014, R. S. 1939. (2) Plaintiff's alleged cause of action, if any, to establish a resulting or constructive trust in his favor as beneficiary in the twenty-four shares of stock issued to Elizabeth Kerber on the 29th day of August, 1916, was barred by the statute of limitations at the time of filing his suit on July 26, 1940. Secs. 1013, 1014, R. S. 1939; Zeitinger v. Annuity Realty Co., 325 Mo. 194, 28 S.W.2d 1030; Hudson v. Cahoon, 193 Mo. 547, 91 S.W.2d 72; Reed v. Painter, 145 Mo. 341, 46 S.W.2d 1089. (3) To establish a resulting trust, it must be pleaded and clearly shown that the funds of the person in whose favor the trust is sought to be established went into the purchase of the property involved. Gaugh v. Gaugh, 321 Mo. 414. (4) It is the rule in this State that final judgments of the probate court are as conclusive as judgments of a court of general jurisdiction. Sheetz v. Kirtley, 62 Mo. 417; McDonald v. McDaniel, 242 Mo. 172; Elevator Co. v. Thompson, 264 Mo. 595; Hidden v. Edwards, 313 Mo. 642. (5) Judgments of the probate court must be attacked, if at all, in a direct proceeding on the ground of defects apparent on the face of the record, or for fraud. Covington v. Chamblin, 156 Mo. 574; Reavis v. Reavis, 135 Mo.App. 199. (6) The statute of limitations is applicable to implied trusts, whether constructive or resulting. Zeitinger v. Annuity Realty Co., 325 Mo. 194; Meyer v. Wise, 133 S.W.2d 321; Shelby County v. Bragg, 135 Mo. 291. (7) Provision in limitation statute allowing ten years for discovery of fraud is subject to rule that one is deemed cognizant of facts which should or could have been known. Foster v. Petree, 141 S.W.2d 131. (8) General doctrine relative to discovery of fraud so as to take it without the bar of statute of limitations, required facts to be pleaded sufficient to relieve pleader of presumption and actual knowledge; and general charge of ignorance at one time and of subsequent knowledge, as well as mere silence is insufficient. Foster v. Petree, 141 S.W.2d 131; City of St. Joseph v. Wyatt, 274 Mo. 566, 203 S.W. 819. (9) In order to establish a resulting trust by parol evidence the proof must be so clear, cogent, positive and convincing as to exclude every reasonable doubt from Chancellor's mind. Mays v. Jackson, 145 S.W.2d 392. (10) Mere failure to disclose that cause of action existed does not prevent running of statute of limitations; there must be actual artifice to prevent knowledge of facts. Mere silence is not sufficient. Armstrong v. Union E. L. & P. Co., 60 S.W.2d 1013; Piggott v. Denton, 46 S.W.2d 618. (11) Nothing less than conscience, good faith and reasonable diligence can call courts of equity into activity, and aid should not be granted to plaintiff who negligently slept on his rights, if any, for seventeen years after he became of age and suffered his demand to become stale. His alleged cause of action is barred by laches as well as the statute of limitations. Snow v. Funck, 41 S.W.2d 2; Smalley v. Queen City Bank, 94 S.W.2d 954; Breit v. Bowland, 100 S.W.2d 599; Hudler v. Guerdan, 113 S.W.2d 1040; Troll v. St. Louis, 257 Mo. 626.

Barrett, C. Westhues and Bohling, CC., concur.

OPINION

BARRETT

This is a suit by Carl Kerber against his mother's executor, E. R. Riemeier, his sister, Vera Waterhout, his half brother, W. A. Rowe, his half sisters, Zula Myers and Hazel Wade, and the W. A. Rowe Floral Company, a corporation. The purpose of the suit is to have himself declared the beneficiary of a trust and the owner of twenty-four shares of stock, of the value of $ 24,000, in the W. A. Rowe Floral Company. The trial court sustained a demurrer to his petition for the reason that it failed to state a cause of action. He refused to plead further and the final judgment, from which he appeals, was entered.

The allegations upon which he relies as stating a cause of action are as follows:

Prior to 1915 his father, John P. Kerber, and W. A. Rowe were partners in the floral business. His father died on January 31, 1915, and W. A. Rowe became the administrator of his estate. Rowe, as administrator, made a false affidavit that his father's personal estate did not exceed in value $ 200, when in fact his interest in the partnership was worth thousands of dollars; that the only asset listed as belonging to John Kerber was an undivided one-half interest in the 11:12 acres of land rented to the floral company and upon which the greenhouses were constructed. That Rowe made false settlements as to the cost of operating the floral business "for the purpose of deceiving the plaintiff's mother, Elizabeth Kerber, into believing that the business was of no value." Carl Kerber then alleges that when Rowe made final settlement of the partnership estate he appropriated all the personal assets of the partnership.

The petition states that on March 6, 1916, his mother was appointed his guardian by the Probate Court of St. Louis County. He was then fourteen years old. That at that time he had an interest in the floral partnership, but that the only asset listed in his estate as a minor was an undivided one-fourth interest in the 11:12 acres of land which was subject to the dower and homestead rights of his mother. He then alleges that Rowe caused his mother to petition the probate court for permission to sell the 11:12 acres and that Rowe became the purchaser, "paying nothing therefor at the time, but giving his notes for the entire purchase price thereof."

It is charged that in 1916 his mother, W. A. Rowe and Rowe's wife organized the W. A. Rowe Floral Company corporation with a capital stock of $ 20,000, divided into two hundred shares. Real estate, including the 11:12 acres, conveyed to the corporation represented the paid up stock. The plaintiff states that the corporation took over all the personalty of the partnership, as well as the real estate; that W. A. Rowe appropriated one hundred seventy-five shares of the stock; that twenty-four shares were issued to his mother and one to Rowe's wife; "that the twenty-four shares issued to Elizabeth Kerber were in truth and in fact the property of this plaintiff, because this plaintiff had at said time an undivided interest in the Rowe and Kerber partnership, and that said Elizabeth Kerber, by reason of her position as guardian of the plaintiff, and by reason of her fiduciary capacity, received said stock as the property of plaintiff, and held the same as trustee for the plaintiff." He then says that he and his sister, Vera Waterhout, were entitled to receive fifty shares of stock and that Rowe was entitled to receive one hundred shares and is now trustee for the plaintiff of twenty-six shares.

Finally it is alleged that plaintiff's mother died on July 16, 1939, and has attempted to will the twenty-four shares of stock to the plaintiff, his si...